The Federal Board of Revenue (FBR) asked all major retailers to ensure the installation of its point-of-sale invoicing app into their systems by the start of December. This will allow them to report their turnover to the tax authorities on a real-time basis.

The revenue board has also introduced the ‘Electronic Invoice System’ for restaurants, cafes, coffee shops, eateries, snack bars, and hotels. It has also directed them to install the Board’s approved fiscal electronic devices/software.

The revenue body issued the SRO (1203(I)/2019) to amend Sales Tax Rules 2006 to make integration of the sales app mandatory for all retailers to facilitate tax payment.

Under the Electronic Invoice System, the registered person specified in rule 150ZA must install these fiscal electronic devices and software, as approved by the Board. These are available on its website with complete technical instructions for installation, configuration, and integration.

The rule 150ZA applies to all businesses that the ‘Electronic Invoice System’ applies to. This is meant for monitoring and tracking of taxable activities by electronic or other means.

The FBR, in a statutory regulatory order (SRO), made it mandatory for tier-1 retailers to provide real-time reporting of their sales to the tax authority, also from December 1, 2019.

According to the FBR, from December 2019, all Tier-I retailers must integrate their retail outlets with the Board’s computerized system for real-time reporting of sales, in the mode and manner prescribed.

The FBR defines tier-1 retailers as those who operate as a unit of a national or international chain of stores or in an air-conditioned shopping mall or plaza. This is excluding kiosks or stalls but includes those whose cumulative electricity bill during the preceding year exceeds Rs. 600,000. This also includes wholesaler-cum-retailers engaged in bulk import and supply of consumer goods to either retailers or the general population. A shop measuring 1,000 square feet in area or more also falls into the tier-1 category.

The FBR also said that the system has already been running for over a year in around 4,000 outlets of 70 famous top textile and leather brands.

The supplies of the finished fabric and locally manufactured finished articles of textile, leather and artificial leather shall be entitled to the reduced rate, subject to conditions. The retail supplies of these items will be subject to the standard rate if they are made from retail outlets which are not integrated in the manner prescribed by the FBR.

The integrated supplier who is found to have tampered with the system will no longer be eligible for the reduced rate, if otherwise applicable, and his input tax will also be reduced, the FBR added.